Apr 10

If I start a Roth IRA and put $100 a month into it and a year later come tax time do I pay taxes on that $100 a month I contributed?

I understand the withdrawals are tax free but what about the contributions?

Are Roth IRAs the best thing ever? Should every ‘average’ american have one?

2 comments so far...

  • Don E Said on April 10th, 2010 at 2:52 pm:

    IRAs are a trap to make you pay more when you have a emergency later and have to pull it out early and pay penalties and taxes at that time.

  • bdancer222 Said on April 10th, 2010 at 3:37 pm:

    With a traditional IRA, your contribution is deducted from your income. It’s untaxed money. You pay the income taxes when you withdraw the money.

    With a Roth IRA, your contribution is not deducted from your income. You pay taxes on it before you contribute it.

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